In his plea allocution, Bernie Madoff strongly implied he ran the largest Ponzi scheme in history all by himself.
Craig Kugel used to work in human resources at Madoff’s firm, Bernard L. Madoff Investment Securities LLC (“BLMIS”). Earlier today, he became the seventh individual to plead guilty in connection with the federal investigation into Madoff’s former firm, according to Bloomberg.
Kugel was charged with, among other things, making false statements in relation to documents required by the Employee Retirement Income Security Act (known as “ERISA”), and subscribing to false income tax returns.
From the U.S. Attorney’s Office press release:
KUGEL was aware that there were individuals on BLMIS’s payroll who did not work for the firm but who nevertheless received salaries and benefits, and he created and maintained false BLMIS employee records on their behalf. Specifically, KUGEL was responsible for submitting an Annual Return (“Form 5500”) concerning BLMIS’s employee benefit plan to the United States Department of Labor (“DOL”). Form 5500 required KUGEL to identify accurately the number of employees at the firm, but instead, he included a number of employees who in fact did not work there.
During his tenure at BLMIS, KUGEL also charged more than $200,000 in personal expenses, including luxury clothes, jewelry, and vacations for himself and his family, to a corporate American Express card, but did not report it as income on his tax returns.
He faces up to 19 years in prison, and will pay at least $2.3 million in restitution. The monies will be used to compensate victims of the fraud. His sentencing is scheduled for December 13.
At today’s hearing Kugel said, “I want to make clear I had nothing to do with the Madoff Ponzi scheme and I was never involved in the Madoff trading operation.”
Kugel’s father, David, was a supervisory trader in Madoff’s operation. Last November, he pleaded guilty to six criminal counts, including falsifying trading and business records, and securities and bank fraud.
It’s rather hard to believe Madoff did not have co-conspirators.